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The Next Level in Frequent Flyer Programs - Whitepaper


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This white paper intends to explore the much needed capabilities, required to embrace the next level of Frequent Flyer Program

Published in: Travel, Business

The Next Level in Frequent Flyer Programs - Whitepaper

  1. 1. NIIT Technologies White Paper Frequent Flyer Programs: Achieving Next LevelFrequent Flyer Programs: Achieving Next Level Amogh Joshi & Syed Masood
  2. 2. CONTENTS Executive Overview 3 Reaching Next level 3 Acquire 3 Know your members 4 Retain 4 Grow 5 Conclusion 6
  3. 3. TRANSPORTATION JOURNEYJOURNEY TRANSPORTATION TRANSPORTATION TRANSPORTATION TRAVEL TRAVEL TRAVEL TRAVEL TRAVEL TOUR GUIDE GUIDE GUIDE CARGO CARGOCARGO CARGO CARGO LOGISTICS LOGISTICS PACKAGING Acquire Customer loyalty is earned by virtue of an enriched user experience that compells the traveller to come back willingly. However, it does make a differece, to have more members on roll so as to understand them better and offer delightful service accordingly. Attracting more members and getting them to reveal themselves has always been a tough job. Member acquisition can be taken to next level by means following key measures: (Next Level) Channels: Traditionally paper forms and website were the only channels of enrolment. With the need to grow, loyalty managers have been busy exploring more and more accessible channels for enrolment. Enrolment through mobile apps and in-flight enrolments via smart tabs are getting trendy. With such channels, enrolment has become not only hassle free for the FFP, but also convenient to members. Next Level of Enrolment Channels Loyalty not only builds better connections with travelers, but also is a significant revenue generator for airlines. A plethora of changes are being made to airline loyalty strategies so as to comply with the digital customers’ expectations and the rapidly changing industry landscape. Abundance of digitally available customer information has opened up new vistas to understand and connect with travelers; however, such opportunities call for major reforms in existing loyalty strategies. The mismatch between opportunity and capability is because of saturated strategies, which very often inhibit fruitful connection with frequent flyers, and out of pace technological innovation. In order to achieve an equilibrium, airlines must strive hard to improve the service experience and minimize disconnects through alternate means like product differentiation, innovation and personalization. Contrary to the convention of just retaining a frequent traveler, loyalty has a new goal today - to earn the members as brand ambassadors, endorsing the services to other prospects. This white paper intends to explore the much needed capabilities, required to embrace the next level of FFP. Reaching Next level Reaching to next level needs sound interpretation of customer behavior, acumen to gauge the current and upcoming shifts and a futuristic vision to provide better customer experience. If the course to Next Level of FFP be mapped, four key factors emerge as important and non negotiable milestones in the due course: i. Acquire: Identify the means to source in more loyal customers. ii. Know: Analysis of traveler data to capture customer behavior and traits for better decision making. iii. Retain: Strategize to prevent the current base from competitors. iv. Grow: Increase value proposition for enhanced customer satisfaction 3 Executive Overview Mobile Apps: Rise of smart phones has brought enrolment to the finger tip of customers. A dedicated app surely helps. Tabs / Other Hand Held Devices: Use of Tabs and other HHDs can make enrolment easier during the journey lifecycle, especially at port or in-flight. Social Platforms: Platforms like Facebook and Whatsapp, where a good amount of customers’ time is spent, pose as a real good option to channelize enrolment through. Kiosk/Portals : Self service options like kiosk or portals can be exploited to gain more members. Also, the provision to issue instant cards is also plausible. Tabs / Other Hand Held Devices: SMS and IVR are in vogue to offer enrolment at will of customers.
  4. 4. Know your members The only way to serve your member and gain the patronage is to know them better. The two step process to understand your member is to capture as much information about them, and being able to process this information to analyze the pattern, need, preferences, likes and dislikes. Data Acquisition The traditional approach of capturing member details upfront, at the time of enrolment, gives a mere peek into customer’s lifestyle and traveling preferences. The questionnaire method is not only cumbersome but also conceives fabricated results (though not always). The Steady Way: A reliable way of understanding customer is to take a steady and ongoing approach towards data capturing. Such an approach consists of two principal components: i. Identify reliable touch points: The travel lifecycle of a passenger goes through various services touch points e.g. Res office, Check-in desk, in-flight, post-flight instances etc. At every point customer offers crucial clues to its preference. A loyalty manager should invest effort to identify such touch points which provide reliable information without compromising convenience. ii. Examine the touch point affairs: To obtain information it is critical to have an ongoing audit of the touch point affairs and drain the information to a central database where it is collated and associated with an entity (Profile). If need be, the touch point transactions could be modified to obtain desired information, however this should never come at the cost of customer experience. There are approximately eight touch points, which can be used to capture information in a steady approach. Of them all in-flight and lounge time, because of their longevity, can be well utilized to understand customer behavior. Tools (like Quiz, questionnaire, games) accompanied by incentives may bear more fruits during this time. Travel preference, e.g. Carrier, schedule, frequency etc. and in-flight preferences can be deduced from booking and check-in data. Analytics Access to data never concludes to a clear understanding, unless it is sorted, processed and analyzed. Raw data is just an increasing on the disk size unless it is analyzed effectively to understand flying patters, preferences, like and dislikes. Even the analysis is waste if the conclusion reached is not actionable. The next level dimension to analytics is time and action. Information not fetched in time or not put to action leads to an opportunity lost. The next level of loyalty calls for better formulation of data and if required, investment in next generation intelligence tools. 4 (Next Level) Convenience: Airlines, which consider customer convenience as paramount, are more likely to get better results. Choice of a channel must always consider ease as an essential factor of decision. Also the enrolment pitch should always be researched and well timed so as not to burden or bore the customer. Travelers are more approachable when in flight; however, enough measure should be taken to keep the enrolment forms short and pleasing though not discounting the required information. (Next Level) Campaign / Promotion: Wonderful results are expected once the offer to enroll is accompanied with an instant value or a promise to deliver value in real short terms. Campaigns are instrumental in educating the prospects about the benefits, privileges and attention associated with a FFP. Promotions not only persuade customers to join the group of the recognized (program) but also facilitate cross/up selling products. Important events, leisure or commercial, can be utilized to launch well crafted campaigns or promotions. Retain The primary objective of FFP is to retain the travelers, thereby mitigating the risk of losing business and any erosion of existing customer base. This objective is achieved in two ways - firstly by understanding customers’ travel preferences and serve them exactly the way they want. Secondly, by making efforts to improve customer engagement through social media, mobile apps and dedicated member portals.
  5. 5. smooth redemption process involves uniform conversion rates, wider currency acceptance and almost equal value of currency across all partners. Grow Grow with Partners Growth is a function of both acquisition and retention of members. Both the factors, contributing to growth, are proportionally related to value offered through a wide network of easily accessible partners. Coalition with air and non-air enterprises motivates frequent use of loyalty program which not only leads to higher rate of enrolment but also delivers a surge in popularity of FFP. The alliances with partners from various industries particularly from banking and financial have enabled travelers to earn and redeem miles through a single program irrespective of their airlines preferences. Grow with Programs Every traveler has its own purpose of travel; some travel for business while others for leisure. The need and expectations from a journey are subject to the purpose of travel, and thus comes the need for programs that are customized for a particular traveler type. The fact is that loyalty programs have already gone niche with corporate programs, leisure programs, family/group programs and student programs. However, it still remains a challenge to get maximum benefits from such programs as careful classification and tactical program designs along with smooth and easy transactions are very important to get desired results. Grow with Promotions and Campaigns If not overdone, members feel connected as well as recognized through cleverly designed campaigns and promotions. Beyond the tradition of letter campaigns, loyalty has numerous platforms at its disposal now. Some of the recent promotions tactics that not only motivates the existing members but also increases the customer base are: • Launch a mobile game for members. • Personalized gifts to members travelling First Class or Business Class. – A personalized bag tag with imprinted member details could do wonders. Apart from routine benefits, like priority baggage or immigration pass etc. loyalty managers must also consider the following perspectives to stay ahead of competitors. Stay in touch FFPs need to explore more touch points apart from existing eight basic air journey touch points. Devices like smart phones and tablets improve brand visibility and reach out to travelers through service messages, alerts, greeting and promotions. Also, wallet presence and brand recall can be enriched by customized cards as well as a network of good partners. Localize Localization of program features based on the commitment to social behavior and cultural integration will be an important factor for penetrating the local market other than the home base. While British members will like to be involved Co-Creation of program benefits, Indian prefer instant and confirmed, available air rewards. Personalize Loyalty Customers love personal attention. Research proves that members feel privileged when addressed by their name while being served in-flight, at check-in gate and other points of interaction. Top tier members even expect personal meet and greet service imparting a sense of recognition. Personalized communication, customized cards, and greetings at the right occasion along with a personalized service package surely do wonder to air loyalty programs. Missing you mailer A missing you mail to frequent flyers that have not flown with airlines in last few months can motivate member to choose the airline whenever they plan to fly next. An interesting promotional offer attached with the mail will bring favorable results faster. Simplify Customers find complex loyalty programs frustrating as excess of rules make redemptions a difficult task. As complexity often discounts the value, FFPs must strike a perfect balance between offered value and complexity associated with the redemption. A 5
  6. 6. • Organize member only events yearly - Qantas Frequent Flyer members have exclusive access to a selection of trusted wine brands from Qantas epiQure cellar. • Provide access to lifestyle events – Hopscotch Entertainment One Offer allows Qantas Club members access to local and international films at cinemas. • Offer surprise benefits to top tier members - instant onboard class upgrade etc. 6 Conclusion Global changes in political and economic environment are continuously shaping needs and expectations of frequent travelers. The ‘next level’ of loyalty can be achieved not only by staying in pace with these changes but also by keeping a futuristic vision and precise understanding of customer behavior. Because of lower acquisition cost, profitability requires increase in repeat business resulting from a delightful service experience. As the expectations are continuously changing, a delightful experience can only be offered by a reformed loyalty proposition packaged with exciting add on. To get the FFP future ready, next level of reforms is required on all loyalty dimensions i.e. Acquire, Know, Retain and Grow. As long as loyalty managers have novel ideas to stand out on these dimensions; viability, growth and profitability of a scheme remains much achievable.
  7. 7. D_62_170414 Write to us at NIIT Technologies is a leading IT solutions organization, servicing customers in North America, Europe, Asia and Australia. It offers services in Application Development and Maintenance, Enterprise Solutions including Managed Services and Business Process Outsourcing to organizations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and Government sectors. With employees over 8,000 professionals, NIIT Technologies follows global standards of software development processes. Over the years the Company has forged extremely rewarding relationships with global majors, a testimony to mutual commitment and its ability to retain marquee clients, drawing repeat business from them. NIIT Technologies has been able to scale its interactions with marquee clients in the BFSI sector, the Travel Transport & Logistics and Manufacturing & Distribution, into extremely meaningful, multi-year "collaborations. NIIT Technologies follows global standards of development, which include ISO 9001:2000 Certification, assessment at Level 5 for SEI-CMMi version 1.2 and ISO 27001 information security management certification. Its data center operations are assessed at the international ISO 20000 IT management standards. About NIIT Technologies About the Author NIIT Technologies Limited 2nd Floor, 47 Mark Lane London - EC3R 7QQ, U.K. Ph: +44 20 70020700 Fax: +44 20 70020701 Europe NIIT Technologies Pte. Limited 31 Kaki Bukit Road 3 #05-13 Techlink Singapore 417818 Ph: +65 68488300 Fax: +65 68488322 Singapore India NIIT Technologies Inc., 1050 Crown Pointe Parkway 5th Floor, Atlanta, GA 30338, USA Ph: +1 770 551 9494 Toll Free: +1 888 454 NIIT Fax: +1 770 551 9229 Americas NIIT Technologies Ltd. Corporate Heights (Tapasya) Plot No. 5, EFGH, Sector 126 Noida-Greater Noida Expressway Noida – 201301, U.P., India Ph: + 91 120 7119100 Fax: + 91 120 7119150 A leading IT solutions organization | 21 locations and 16 countries | 8000 professionals | Level 5 of SEI-CMMi, ver1.2 ISO 27001 certified | Level 5 of People CMM Framework Amogh Joshi Amogh is a Business Solution Specialist with NIIT Technologies TTL vertical. His passion is to provide creative CRM strategy that positively impacts on customer service, cost reductions and profit realization. Amogh has also worked extensively on various aspect of Airline Operations and processes. He has actively participated and contributed in designing and implementing different loyalty programs around the globe for CRANE for King Club (FFP for Kingfisher Airlines), CRIS for Skywards (FFP for Emirates Airlines), and CIS for Flying Club (FFP for Virgin Atlantic Airlines). With around 11 years of work experience in design, development and support of IT systems for airlines and travel domain using SDLC and Agile methodologies, Amogh has been a catalyst in steering and formulating business strategies for organizations to achieve maximum gains on information technology investment. He is a Certified Scrum Master, Oracle Certified Professional and an accomplished senior information technology professional with a sharp focus on designing quality solutions that is required in materializing customer centric business strategies. To know more, Connect with our Experts Syed Masood Syed is a Business Analyst with NIIT Technologies Ltd, TTL vertical, one of the largest IT service providers to Airlines. He has been instrumental in implementing CRM and Loyalty solutions for global airlines, hotel chains, cruise lines and railways. Apart from Loyalty, he plays a crucial role in developing business assets on other airline operations including, Passenger services, Border Security, Passenger Screening and Profiling. Across the globe, he has designed and implemented key IT solutions for airlines, ITCOS and Travel Agencies like American Express, Air India, China Eastern, Swiss Air, British Airways, South African Airways, SITA and Sabre. As an avid writer he has published several whitepapers and case studies on airline processes. To know more, Connect with our Experts